Posted on 01/23/2003 11:07:18 AM PST by RCW2001
23 January 2003 18:53
By Adam Entous
WASHINGTON, Jan 23 (Reuters) - Promising to cushion the economic shock of a possible war with Iraq, the Bush administration is working to complete aid packages for Israel, Turkey and Jordan that could total nearly $30 billion over several years, officials familiar with U.S. plans said on Thursday.
The administration has set up two "working groups" to examine Israel's request for $4 billion in additional military assistance and $8 billion in U.S.-backed loan guarantees. The proceeds would be spread out over the next three years.
A deal could be reached as early as next month, although U.S. officials were cautious about the timing.
Israel, battered by the global economic slowdown and a two-year-old Palestinian uprising for independence, has already agreed to a provision meant to ensure the funds are not spent on settlement activities.
Israel is already the top recipient of U.S. foreign aid, receiving close to $3 billion in mostly military assistance each year. A new aid package would come on top of existing U.S. commitments.
The Bush administration is close to completing separate economic aid packages for U.S. allies Turkey and Jordan, congressional sources said.
Turkey is expected to receive as much as $14 billion, most of it in the form of loan guarantees, in exchange for cooperation in a possible war.
Washington would look to Ankara to allow U.S. troops and aircraft to open a "northern front" against Iraq. But Turkey is reluctant to agree to a war on its neighbor, fearing economic and military turmoil, and has launched a regional diplomatic initiative to discuss ways to avoid war.
Washington has also promised Jordan an aid package worth more than $1 billion that could be sent to Congress for approval in the coming weeks, officials said.
Jordan's King Abdullah said unnamed Arab countries had promised to supply Jordan with its energy needs in the event war ruptures its lifeline with Iraq, its sole crude oil supplier for over a decade.
Jordan, wedged between Israel to the west and Iraq to the east, relies on cheap Iraqi oil that saves the economy at least $350 million annually.
NO DOLLAR FIGURE SET YET White House officials say no dollar figures have been set.
"We have great confidence in the Israeli economy and are continuing to examine how the U.S. can contribute to helping to ensure its bright future," said White House National Security Council spokesman Sean McCormack.
"We will pursue this matter in bilateral working groups, which will begin meeting in the coming weeks," he added. "Consideration of the specifics will have to await U.S. review of the Israeli proposals and the ensuing discussions."
Under Israel's proposal, the United States would provide $4 billion in military aid in three annual installments, according to U.S. sources briefed by the administration and Israel.
Israel has agreed to pay loan fees, including subsidy costs, for the $8 billion in loan guarantees. Israel expects those costs to be less than $200 million.
Israel, which has never defaulted on its loans, would find it easier to raise funds with U.S. backing.
Under the Israeli proposal, the United States would deduct from the face value of the loan guarantees any Israeli expenditures on settlement activities in Palestinian areas.
When Israel received $10 billion of loan guarantees in the early 1990s as it sought to settle immigrants from the former Soviet Union, Bush's father, who was U.S. president at the time, imposed similar restrictions on settlement funding.
But no final decisions have been made and U.S. sources said the proposed economic aid package could run into opposition in the U.S. Congress unless stricter controls ensure the funds are not spent indirectly on settlement activities.
FYI, in rough terms, $30 billion could establish a permanent colony on the Moon--or fund a manned Mars mission.
(guitar music intro...)..."Where does all the money come from?...long time taxing..."
I'm beginning to believe there is no such thing as money.
FMCDH
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